BEIJING, June 24,
2022 /PRNewswire/ -- China Online Education
Group ("51Talk" or the "Company") (NYSE:COE), a global online
education platform with core expertise in English education,
announced its unaudited financial results for the first quarter
ended March 31, 2022.
The Company Enters into Definitive Agreement to
Spin off China Mainland Business
The company has entered into a definitive share purchase
agreement, dated June 24, 2022 (the
"Share Purchase Agreement"), with Dasheng
Holding (HK) Limited ("Dasheng"), an entity controlled by
Mr. Jiajia Jack Huang, chairman of
the board of directors (the "Board") and chief executive officer of
the Company, pursuant to which Mr. Jiajia
Jack Huang, through Dasheng, will acquire all of the
Company's online English tutoring businesses in the China mainland, including all associated
liabilities and assets (the "China Mainland Business"), for
US$1. Upon the Closing, the Company
expects to shift from a negative net assets position to a positive
net assets position, showing a significant improvement.
The Company's overseas business outside the China mainland and its associated assets and
liabilities are not part of the Transaction and will be the
Company's strategic focus going forward.
As the Company will focus on its overseas business going
forward, starting from the first quarter of 2022, the Company
changed its reporting currency from Renminbi ("RMB") to U.S. dollar
("US$"). Financial information of prior periods have been recast as
if the Company always used US$ as the reporting currency during
each period.
First Quarter 2022 Financial and
Operating Highlights
- Net revenues were US$9.5 million,
a 89.7% decrease from US$92.4 million
for the first quarter of 2021.
- Gross margin was negative 14.0%, compared with 73.4% for the
first quarter of 2021.
- GAAP net loss was US$21.2
million, compared with GAAP net income US$1.2 million for the first quarter of
2021.
- Non-GAAP net loss[1] was US$20.8 million, compared with non-GAAP net
income US$2.6 million for the first
quarter of 2021.
- Operating cash outflow was US$29.2
million, compared with US$6.0
million cash inflow for the first quarter of 2021.
- Cash, cash equivalents, restricted cash, time deposits and
short-term investments balance reached US$126.4 million as of March 31, 2022.
Key Financial and
Operating Data
|
For the three months
ended
|
|
|
|
Mar.
31,
|
|
Mar.
31,
|
|
Y-o-Y
|
|
2021
|
|
2022
|
|
Change
|
|
|
|
|
|
|
Net revenues
(in US$ millions)
|
92.4
|
|
9.5
|
|
(89.7) %
|
Overseas business
|
-
|
|
1.9
|
|
-
|
Mainland China business
|
92.4
|
|
7.6
|
|
(91.8) %
|
Net income/(loss)
(in US$ millions )
|
1.2
|
|
(21.2)
|
|
(1,866.7) %
|
Non-GAAP net
income/(loss) (in US$ millions
)
|
2.6
|
|
(20.8)
|
|
(705.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
students with attended lesson
consumption[2] (in thousands)
|
-
|
|
231.1
|
|
-
|
Active
students with general lesson consumption[3]
(in thousands)
|
392.7
|
|
298.6
|
|
(24.0) %
|
|
|
|
|
|
|
[1] For
more information on non-GAAP financial measures, please see the
section of "Use of Non-GAAP Financial Measures" and the table
captioned "Reconciliation of Non-GAAP Measures to the Most
Comparable GAAP Measures" set forth in this press
release.
|
[2] An
"active student with attended lesson consumption" for a specified
period refers to a student who attended at least one paid lesson,
excluding those students who only attended paid live broadcasting
lessons or trial lessons.
|
[3] An
"active student with general lesson consumption" for a specified
period refers to a student who consumed at least one paid lesson
credit, in attendance or due to minimum consumption or
expiration,excluding those students who only attended paid live
broadcasting lessons or trial lessons.
|
"In order to comply with the government policies in China and focus on our overseas business, we
have started restructuring our business and reached a definitive
agreement to spin off our China Mainland Business on June 24.
After the closing of the spin-off transaction, 100% of the
Company's revenues will be derived from overseas markets, and the
Company will have a positive net equity. Going forward, we will
continue to work with our teachers to provide effective and
advanced educational services to our overseas students." said Mr.
Jack Jiajia Huang, Founder, Chairman
and Chief Executive Officer of 51Talk.
"With the rapid growth of our overseas business, we exceeded our
target on gross billings in the first quarter. Our first quarter
net gross billings have reached $5.3
million, representing 79.9% sequential growth. In the first
quarter, the number of our paying students reached 6.5k and the number of our active students with
attended lesson consumption reached 9.3k with students from more than 50 countries
and regions outside the China
mainland. In addition, our overseas business achieved its
first positive monthly operating cash flow in March, within only
eight months since we launched our overseas business. Revenues from
overseas business in the first quarter was $1.9 million with gross margin of 78.0%. The
rapid growth proved that the strong demand and the business model
in overseas markets are very much similar to that in the
China mainland and we are
confident that overseas business will achieve sustainable growth
similar to what we had accomplished in the China mainland." concluded Mr. Huang.
First Quarter 2022 Financial Results
Net Revenues
Net revenues for the first quarter of 2022 were US$9.5 million, a 89.7% decrease from
US$92.4 million for the same quarter
last year. We did not recognize US$48.0 million non-compliant lesson consumptions
as revenues and recorded the amount as contingent liabilities instead. Meanwhile,
the number of active students with general lesson consumption in
the first quarter of 2022 was 298,600, a 24.0% decrease from
392,700 for the same quarter last year.
Net revenues for overseas business in the first quarter were
US$ 1.9 million with 9.3
thousand active students with attended lesson consumption.
Cost of Revenues
Cost of revenues for the first quarter of 2022 was US$10.8 million, a 55.9% decrease from
US$24.6 million for the same quarter
last year. The decrease was primarily due to the decrease in total
service fees paid to teachers, mainly resulting from an
decreased number of paid lessons. Cost of revenues for overseas
business in the first quarter was US$0.4
million.
Gross (Loss)/Profit and Gross Margin
Gross loss for the first quarter of 2022 was US$1.3 million, a 102.0% decrease from
US$67.8 million for the same quarter
last year. Gross profit for overseas business in the first quarter
was US$1.5 million.
Gross margin for the first quarter of 2022 was negative 14.0%,
compared with 73.4% for the same quarter last year. The
decrease was because we did not recognize US$48.0 million non-compliant lesson
consumptions as revenues for China Mainland Business but still
recorded the corresponding cost of revenues of US$9.1 million. Gross margin for overseas
business in the first quarter of 2022 was 77.9%.
Operating Expenses
Total operating expenses for the first quarter of 2022 were
US$20.6 million, a 70.0%
decrease from US$68.6 million
for the same quarter last year. The decrease was mainly due to the
decrease in sales and marketing expenses and product development
expenses. Total operating expenses for overseas business were
US$5.0 million in the first quarter
of 2022.
Sales and marketing expenses for the first quarter of 2022 were
US$7.1 million, a 85.6% decrease
from US$49.1 million for the
same quarter last year. The decrease was mainly due to
lower sales personnel costs related to decreases in the number of
sales and marketing personnel and lower marketing and branding
expenses. Excluding share-based compensation expenses, non-GAAP
sales and marketing expenses for the first quarter of 2022 were
US$7.1 million, a 85.5% decrease from
US$48.7 million for the same quarter
last year. Sales and marketing expenses for overseas business were
US$2.0 million. Excluding share-based
compensation expenses, non-GAAP sales and marketing expenses for
overseas business were US$2.0
million.
Product development expenses for the first quarter of 2022 were
US$2.0 million, a 77.4% decrease from
US$8.9 million for the same
quarter last year. The decrease was primarily due to lower product
development personnel costs related to decreases in the number of
personnel. Excluding share-based compensation expenses, non-GAAP
product development expenses for the first quarter of 2022 were
US$2.0 million, a 77.1% decrease from
US$8.6 million for the same
quarter last year. Product development expenses for overseas
business in the first quarter were US$1.1
million. Excluding share-based compensation expenses,
non-GAAP product development expenses for overseas business in the
first quarter of 2022 were US$1.1
million.
General and administrative expenses for the first quarter of
2022 were US$11.5 million, a
7.9% increase from US$10.7 million for the same quarter last
year. The increase was primarily due to value added tax of
US$2.9 million related to
non-compliant lesson consumptions, accrued value added tax and
related tax penalty of US$2.8 million, and restructuring cost of
US$0.8 million during this
quarter. Excluding share-based compensation expenses, non-GAAP
general and administrative expenses for the first quarter of 2022
were US$11.2 million, a 12.5%
increase from US$10.0 million
for the same quarter last year. Overseas business general and
administrative expenses for the first quarter of 2022 were
US$1.9 million. Excluding share-based
compensation expenses, overseas business non-GAAP general and
administrative expenses for the first quarter of 2022 were
US$1.6 million.
Other income
On September 30, 2019, the
Ministry of Finance and the State Taxation Administration announced
that from October 1, 2019 to
December 31, 2021, taxpayers engaging
in the provision of essential services are allowed to deduct an
extra 15% of the deductible input value-added tax for the current
period from the payable value-added tax. In 2022, the tax
preferential policy has been extended to December 31, 2022. The impact of the policy of
additional value-added tax credit for the income generated by the
essential services provided by enterprises was US$0.2 million and US$1.7
million in the first quarter of 2022 and 2021
respectively.
(Loss)/income from Operations
Loss from operations for the first quarter of 2022 was
US$21.7 million, compared with
operating income of US$0.9 million
for the same quarter last year. Loss from operations for overseas
business in the first quarter of 2022 was US$3.5 million.
Non-GAAP loss from operations for the first quarter of 2022 was
US$21.4 million, compared with
non-GAAP operating income of US$2.3
million for the same quarter last year. Non-GAAP loss from
operations for overseas business in the first quarter were
US$3.2 million.
Net (loss)/income
Net loss for the first quarter of 2022 was US$21.2 million, compared with net income of
US$1.2 million for the same quarter
last year. Net loss for overseas businss in the first quarter was
US$3.4 million.
Non-GAAP net loss for the first quarter of 2022 was
US$20.8 million, compared
with non-GAAP net income of US$2.6
million for the same quarter last year. Non-GAAP net
loss for overseas business in the first quarter was
US$3.1 million.
Income tax expense for the first quarter of 2022 was
US$2.1 million.
Basic net loss per share attributable to ordinary
shareholders for the first quarter of 2022 was US$0.06, compared with basic net income per share
of US$0.00 for the same quarter
last year. Diluted net loss per share attributable to
ordinary shareholders for the first quarter of 2022 was
US$0.06, compared with diluted net
income per share of US$0.00 for the
same quarter last year.
Non-GAAP basic net loss per share attributable to
ordinary shareholders for the first quarter of 2022 was
US$0.06, compared with non-GAAP basic
net income per share attributable to ordinary shareholders of
US$0.01 for the same quarter
last year. Non-GAAP diluted net loss per
share attributable to ordinary shareholders for the first
quarter of 2022 was US$0.06, compared
with non-GAAP diluted net income per share attributable to
ordinary shareholders of US$0.01 for the same quarter last year.
Basic net loss per American depositary share ("ADS")
attributable to ordinary shareholders for the first quarter of 2022
was US$0.95, compared with basic net
income per ADS of US$0.06 for
the same quarter last year. Diluted net loss per
ADS attributable to ordinary shareholders for the first
quarter of 2022 was US$0.95, compared
with diluted net income per ADS of US$0.05 for the same quarter last year. Each ADS
represents 15 Class A ordinary shares.
Non-GAAP basic net loss per ADS attributable to
ordinary shareholders for the first quarter of 2022 was
US$0.94, compared with non-GAAP
basic net income per ADS attributable to ordinary shareholders of
US$0.12 for the same quarter
last year. Non-GAAP diluted net loss per ADS attributable
to ordinary shareholders for the first quarter of 2022 was
US$0.94, compared with non-GAAP
diluted net income per ADS attributable to ordinary
shareholders of US$0.11 for the
same quarter last year.
Balance Sheet
As of March 31, 2022, the Company
had total cash, cash equivalents, restricted cash, time deposits
and short-term investments of US$126.4 million, compared with US$155.7 million as of December 31, 2021. The Company had non-current
time deposits of US$15.8 million,
compared with US$15.8 million as of
December 31, 2021. The Company had
restricted cash of US$7.7 million,
compared with US$7.9 million as of
December 31, 2021.
The Company had advances from students[4] (current
and non-current) of US$216.6 million
as of March 31, 2022, compared with
US$274.7 million as of December 31, 2021. The Company had contingent
liabilities of US$51.0 million
related to non-compliant lesson consumptions and corresponding VAT
for China Mainland Business.
[4]
"Advances from students", which is defined as the amount of
obligation to transfer good or service to students or business
partners for which consideration has been received from students in
advance. The deposits from students are also presented in the
total amount of "advances from students".
|
Outlook
For the second quarter of 2022, the Company currently
expects net gross billings of oversea business to be between
$7.2 million and $7.5 million,representing a sequential
growth between 36.1% and 41.8%.
The above outlook is based on current market conditions and
reflects the Company's current and preliminary estimates of market
and operating conditions and customer demand, which are all subject
to change.
In addition, the Company's future operational and financial
performance depends on the future development of the implementation
of the Opinion and the success of the Company's business adjustment
plans, which is subject to inherent uncertainties at this time.
Conference Call
The Company's management will host an earnings conference call
at 8:00 AM U.S. Eastern Time on
June 24, 2022 (8:00 PM
Beijing/Hong Kong time on
June 24, 2022).
Dial-in details for the earnings conference call are as
follows:
UnitedStates (toll
free):
|
1-66-264-5888
|
International:
|
1-412-317-5226
|
Mainland
China:
|
400-120-1203
|
Hong Kong (toll
free):
|
800-905-945
|
Hong Kong:
|
852-3018-4992
|
Participants should dial-in at least 5 minutes before the
scheduled start time and ask to be connected to the call for "China
Online Education Group."
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website at
http://ir.51talk.com.
A replay of the conference call will be accessible until
July 1, 2022, by dialing the
following telephone numbers:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
9842103
|
About China Online Education Group
China Online Education Group (NYSE: COE) is a global online
education platform with core expertise in English education. The
Company's mission is to make quality education accessible and
affordable. The Company's online and mobile education platforms
enable students to take live interactive English lessons, on
demand. The Company connects its students with a large pool of
highly qualified teachers that it assembled using a shared economy
approach, and employs student and teacher feedback and data
analytics to deliver a personalized learning experience to its
students.
Use of Non-GAAP Financial Measures
In evaluating its business, 51Talk considers and uses the
following measures defined as non-GAAP financial measures by the
SEC as supplemental metrics to review and assess its operating
performance: non-GAAP sales and marketing expenses, non-GAAP
product development expenses, non-GAAP general and administrative
expenses, non-GAAP operating expenses, non-GAAP operating income,
non-GAAP net income, non-GAAP net income attributable to ordinary
shareholders, and non-GAAP net income attributable to ordinary
shareholders per share and per ADS. To present each of these
non-GAAP measures, the Company excludes share-based compensation
expenses. The presentation of these non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for
the financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures,
please see the table captioned "Reconciliations of non-GAAP
measures to the most comparable GAAP measures" set forth at the end
of this press release.
51Talk believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance by
excluding share-based compensation expenses that may not be
indicative of its operating performance from a cash perspective.
51Talk believes that both management and investors benefit from
these non-GAAP financial measures in assessing its performance and
when planning and forecasting future periods. These non-GAAP
financial measures also facilitate management's internal
comparisons to 51Talk's historical performance. 51Talk computes its
non-GAAP financial measures using the same consistent method from
quarter to quarter and from period to period. 51Talk believes these
non-GAAP financial measures are useful to investors in allowing for
greater transparency with respect to supplemental information used
by management in its financial and operational decision-making. A
limitation of using non-GAAP measures is that these non-GAAP
measures exclude share-based compensation expenses that have been
and will continue to be for the foreseeable future a significant
recurring expense in the 51Talk's business. Management compensates
for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying table at the end of this press release provides more
details on the reconciliations between GAAP financial measures that
are most directly comparable to non-GAAP financial measures.
Safe Harbor Statement
This press release contains statements that may constitute
"forward-looking" statements pursuant to the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will", "expects", "anticipates", "aims",
"future", "intends", "plans", "believes", "estimates", "likely to"
and similar statements. Among other things, 51Talk's business
outlook and quotations from management in this announcement, as
well as 51Talk's strategic and operational plans, contain
forward-looking statements. 51Talk may also make written or oral
forward-looking statements in its periodic reports to the
Securities and Exchange Commission ("SEC"), in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about 51Talk's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: 51Talk's goals and strategies; 51Talk's expectations
regarding demand for and market acceptance of its brand and
platform; 51Talk's ability to retain and increase its student
enrollment; 51Talk's ability to offer new courses; 51Talk's ability
to engage, train and retain new teachers; 51Talk's future business
development, results of operations and financial condition;
51Talk's ability to maintain and improve infrastructure necessary
to operate its education platform; competition in the online
education industry in China; the
expected growth of, and trends in, the markets for 51Talk's course
offerings in China; relevant
government policies and regulations relating to 51Talk's corporate
structure, business and industry; general economic and business
condition in China, the Philippines and elsewhere and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in 51Talk's filings
with the SEC. All information provided in this press release is as
of the date of this press release, and 51Talk does not undertake
any obligation to update any forward-looking statement, except as
required under applicable law.
For investor and media inquiries, please contact:
China Online Education Group
Investor Relations
ir@51talk.com
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
Dec.
31,
|
|
Mar.
31
|
|
|
|
|
|
|
2021
|
|
2022
|
|
|
|
|
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
33,680
|
|
47,283
|
|
|
|
|
Restricted
cash
|
|
7,929
|
|
7,652
|
|
|
|
|
Time
deposits
|
|
7,597
|
|
7,602
|
|
|
|
|
Short-term
investments
|
|
90,652
|
|
48,032
|
|
|
|
|
Inventory
|
|
169
|
|
150
|
|
|
|
|
Prepaid expenses and
other current assets
|
|
11,223
|
|
14,813
|
|
|
|
Total current
assets
|
|
151,250
|
|
125,532
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
2,669
|
|
1,580
|
|
|
|
|
Intangible assets,
net
|
|
1,758
|
|
1,609
|
|
|
|
|
Goodwill
|
|
-
|
|
-
|
|
|
|
|
Right-of-use
assets
|
|
5,789
|
|
4,990
|
|
|
|
|
Time
deposits
|
|
15,821
|
|
15,841
|
|
|
|
|
Deferred tax
assets
|
|
8,919
|
|
6,902
|
|
|
|
|
Other non-current
assets
|
|
862
|
|
943
|
|
|
|
Total non-current
assets
|
|
35,818
|
|
31,865
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
187,068
|
|
157,397
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
AND SHAREHOLDERS'
DEFICIT
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Contingent
liabilities[5]
|
|
-
|
|
50,968
|
|
|
|
|
Advances from
students
|
|
274,514
|
|
216,407
|
|
|
|
|
Accrued expenses and
other current liabilities
|
|
15,089
|
|
13,357
|
|
|
|
|
Lease
liability
|
|
3,043
|
|
2,687
|
|
|
|
|
Taxes
payable
|
|
4,396
|
|
7,700
|
|
|
|
Total current
liabilities
|
|
297,042
|
|
291,119
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Advances from
students
|
|
177
|
|
166
|
|
|
|
|
Lease
liability
|
|
3,033
|
|
2,544
|
|
|
|
|
Other non-current
liabilities
|
|
243
|
|
246
|
|
|
|
Total non-current
liabilities
|
|
3,453
|
|
2,956
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
300,495
|
|
294,075
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
deficit
|
|
(113,427)
|
|
(136,678)
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' deficit
|
|
187,068
|
|
157,397
|
|
|
|
|
|
|
|
|
|
|
|
|
[5]
Contingent liabilities represent the revenues and
corresponding valued added taxes which did not be recognized
from lesson consumptions of non-compliant packages.
|
CHINA ONLINE
EDUCATION GROUP
|
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
(In thousands except
for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
Net revenues
|
|
92,416
|
|
66,824
|
|
9,509
|
|
Cost of
revenues
|
|
(24,583)
|
|
(13,793)
|
|
(10,844)
|
|
Gross
profit/(loss)
|
|
67,833
|
|
53,031
|
|
(1,335)
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(49,093)
|
|
(36,848)
|
|
(7,062)
|
|
|
Product development
expenses
|
|
(8,885)
|
|
(2,384)
|
|
(2,009)
|
|
|
General and
administrative expenses
|
|
(10,653)
|
|
(10,887)
|
|
(11,499)
|
|
|
Goodwill and
intangibles impairment
|
|
-
|
|
(62)
|
|
-
|
|
Total operating
expenses
|
|
(68,631)
|
|
(50,181)
|
|
(20,570)
|
|
Other income
|
|
1,708
|
|
86
|
|
184
|
|
Income/(loss) from
operations
|
|
910
|
|
2,936
|
|
(21,721)
|
|
Interest
income
|
|
1,789
|
|
896
|
|
539
|
|
Interest
expenses
|
|
-
|
|
(2)
|
|
(11)
|
|
Other
(expenses)/income, net
|
|
(525)
|
|
1,203
|
|
2,088
|
|
Income/(loss) before
income tax expenses
|
|
2,174
|
|
5,033
|
|
(19,105)
|
|
Income tax
(expenses)/benefits
|
|
(938)
|
|
5,420
|
|
(2,066)
|
|
Net
income/(loss), all attributable to the Company's ordinary
shareholders
|
|
1,236
|
|
10,453
|
|
(21,171)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(In thousands except
for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
Weighted average number
of ordinary shares used in computing basic
income/(loss) per share
|
|
322,796,828
|
332,760,727
|
|
334,056,649
|
|
|
Weighted average number
of ordinary shares used in computing diluted
income/(loss) per share
|
|
342,150,096
|
337,351,518
|
|
334,056,649
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share attributable to ordinary shareholders
|
|
|
|
Basic
|
|
0.00
|
|
0.03
|
|
(0.06)
|
|
Diluted
|
|
0.00
|
|
0.03
|
|
(0.06)
|
|
Net income/(loss) per
ADS attributable to ordinary shareholders
|
Basic
|
|
0.06
|
|
0.47
|
|
(0.95)
|
|
Diluted
|
|
0.05
|
|
0.46
|
|
(0.95)
|
|
|
Comprehensive
income/(loss):
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
1,236
|
|
10,453
|
|
(21,171)
|
|
Other comprehensive
income/(loss)
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments
|
|
277
|
|
(769)
|
|
(1,896)
|
|
Total
comprehensive income/(loss)
|
|
1,513
|
|
9,684
|
|
(23,067)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(383)
|
|
(62)
|
|
8
|
|
Product development
expenses
|
|
(267)
|
|
47
|
|
(38)
|
|
General and
administrative expenses
|
|
(695)
|
|
(458)
|
|
(293)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
(49,093)
|
|
(36,848)
|
|
(7,062)
|
|
|
Less: Share-based
compensation expenses
|
|
(383)
|
|
(62)
|
|
8
|
|
|
Non-GAAP sales and
marketing expenses
|
|
(48,710)
|
|
(36,786)
|
|
(7,070)
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
(8,885)
|
|
(2,384)
|
|
(2,009)
|
|
|
Less: Share-based
compensation expenses
|
|
(267)
|
|
47
|
|
(38)
|
|
|
Non-GAAP product
development expenses
|
|
(8,618)
|
|
(2,431)
|
|
(1,971)
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
(10,653)
|
|
(10,887)
|
|
(11,499)
|
|
|
Less: Share-based
compensation expenses
|
|
(695)
|
|
(458)
|
|
(293)
|
|
|
Non-GAAP general and
administrative expenses
|
|
(9,958)
|
|
(10,429)
|
|
(11,206)
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangibles impairment
|
|
-
|
|
(62)
|
|
-
|
|
|
Less: Share-based
compensation expenses
|
|
-
|
|
-
|
|
-
|
|
|
Non-GAAP goodwill and
intangibles impairment
|
|
-
|
|
(62)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
(68,631)
|
|
(50,181)
|
|
(20,570)
|
|
|
Less: Share-based
compensation expenses
|
|
(1,345)
|
|
(473)
|
|
(323)
|
|
|
Non-GAAP operating
expenses
|
|
(67,286)
|
|
(49,708)
|
|
(20,247)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations
|
|
910
|
|
2,936
|
|
(21,721)
|
|
|
Less: Share-based
compensation expenses
|
|
(1,345)
|
|
(473)
|
|
(323)
|
|
|
Non-GAAP income/(loss)
from operations
|
|
2,255
|
|
3,409
|
|
(21,398)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
Reconciliation of
Non-GAAP Measures to the Most Comparable GAAP
Measures
|
(In thousands
except for number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Income tax
expenses
|
|
(938)
|
|
5,420
|
|
(2,066)
|
|
Less: Tax impact of
Share-based compensation expenses
|
|
-
|
|
-
|
|
-
|
|
Non-GAAP income tax
expenses
|
|
(938)
|
|
5,420
|
|
(2,066)
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss), all attributable to
the Company's ordinary shareholders
|
|
1,236
|
|
10,452
|
|
(21,171)
|
|
Add back: Share-based
compensation expenses, net of tax
|
|
1,345
|
|
473
|
|
323
|
|
Non-GAAP net
income/(loss), all attributable to
the Company's ordinary shareholders
|
|
2,581
|
|
10,925
|
|
(20,848)
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used in computing basic income/(loss) per
share
|
|
322,796,828
|
|
332,760,727
|
|
334,056,649
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used in computing diluted income/(loss) per
share
|
|
342,150,096
|
|
337,351,518
|
|
334,056,649
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income/(loss) per share attributable to ordinary
shareholders
|
|
|
|
|
|
basic
|
|
0.01
|
|
0.03
|
|
(0.06)
|
|
diluted
|
|
0.01
|
|
0.03
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income/(loss) per ADS attributable to ordinary
shareholders
|
|
|
|
|
|
basic
|
|
0.12
|
|
0.49
|
|
(0.94)
|
|
diluted
|
|
0.11
|
|
0.49
|
|
(0.94)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED ADDITIONAL
INFORMATION
|
(In thousands except
for number of shares and per share data)
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
|
|
|
|
Mainland China
|
|
92,416
|
|
66,165
|
|
7,631
|
|
Overseas
|
|
-
|
|
659
|
|
1,878
|
|
Total net
revenues
|
|
92,416
|
|
66,824
|
|
9,509
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
Mainland China
|
|
(24,583)
|
|
(13,658)
|
|
(10,429)
|
|
Overseas
|
|
-
|
|
(135)
|
|
(415)
|
|
Total cost of
revenues
|
|
(24,583)
|
|
(13,793)
|
|
(10,844)
|
|
|
|
|
|
|
|
|
|
Gross
profit/(loss)
|
|
|
|
|
|
|
|
Mainland China
|
|
67,833
|
|
52,507
|
|
(2,798)
|
|
Overseas
|
|
-
|
|
524
|
|
1,463
|
|
Total gross
profit/(loss)
|
|
67,833
|
|
53,031
|
|
(1,335)
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
|
|
Mainland China
|
|
73.4 %
|
|
79.4 %
|
|
(36.7) %
|
|
Overseas
|
|
-
|
|
79.5 %
|
|
77.9 %
|
|
Total gross
margin
|
|
73.4 %
|
|
79.4 %
|
|
(14.0) %
|
|
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED ADDITIONAL
INFORMATION
|
(In thousands except
for number of shares and per share data)
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
(49,093)
|
|
(35,308)
|
|
(5,069)
|
|
Overseas
|
|
-
|
|
(1,540)
|
|
(1,993)
|
|
Total sales and
marketing expenses
|
|
(49,093)
|
|
(36,848)
|
|
(7,062)
|
|
|
|
|
|
|
|
|
|
Product development
expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
(8,885)
|
|
(2,332)
|
|
(908)
|
|
Overseas
|
|
-
|
|
(52)
|
|
(1,101)
|
|
Total product
development expenses
|
|
(8,885)
|
|
(2,384)
|
|
(2,009)
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
(10,653)
|
|
(8,859)
|
|
(9,614)
|
|
Overseas
|
|
-
|
|
(2,028)
|
|
(1,885)
|
|
Total general and
administrative expenses
|
|
(10,653)
|
|
(10,887)
|
|
(11,499)
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangibles impairment
|
|
|
|
|
|
|
|
Mainland China
|
|
-
|
|
(62)
|
|
-
|
|
Overseas
|
|
-
|
|
-
|
|
-
|
|
Total Goodwill and
intangibles impairment
|
|
-
|
|
(62)
|
|
-
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
(68,631)
|
|
(46,561)
|
|
(15,591)
|
|
Overseas
|
|
-
|
|
(3,620)
|
|
(4,979)
|
|
Total operating
expenses
|
|
(68,631)
|
|
(50,181)
|
|
(20,570)
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
|
Mainland China
|
|
1,708
|
|
86
|
|
184
|
|
Overseas
|
|
-
|
|
-
|
|
-
|
|
Total Other
income
|
|
1,708
|
|
86
|
|
184
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations
|
|
|
|
|
|
|
|
Mainland China
|
|
910
|
|
6,032
|
|
(18,205)
|
|
Overseas
|
|
-
|
|
(3,096)
|
|
(3,516)
|
|
Total income/(loss)
from operations
|
|
910
|
|
2,936
|
|
(21,721)
|
|
|
|
|
|
|
|
|
|
CHINA ONLINE
EDUCATION GROUP
|
UNAUDITED ADDITIONAL
INFORMATION
|
(In thousands except
for number of shares and per share data)
|
|
|
|
|
For the three months
ended
|
|
|
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Mar.
31,
|
|
|
|
|
2021
|
|
2021
|
|
2022
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
|
|
Mainland China
|
|
1,789
|
|
822
|
|
491
|
|
Overseas
|
|
-
|
|
74
|
|
48
|
|
Total interest
income
|
|
1,789
|
|
896
|
|
539
|
|
|
|
|
|
|
|
|
|
Interest
expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
-
|
|
-
|
|
-
|
|
Overseas
|
|
-
|
|
(2)
|
|
(11)
|
|
Total interest
expenses
|
|
-
|
|
(2)
|
|
(11)
|
|
|
|
|
|
|
|
|
|
Other
(expenses)/income, net
|
|
|
|
|
|
|
|
Mainland China
|
|
(525)
|
|
1,182
|
|
2,034
|
|
Overseas
|
|
-
|
|
21
|
|
54
|
|
Total other
(expenses)/income, net
|
|
(525)
|
|
1,203
|
|
2,088
|
|
|
|
|
|
|
|
|
|
Income/(loss) before
income tax expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
2,174
|
|
8,036
|
|
(15,680)
|
|
Overseas
|
|
-
|
|
(3,003)
|
|
(3,425)
|
|
Total income/(loss)
before income tax expenses
|
|
2,174
|
|
5,033
|
|
(19,105)
|
|
|
|
|
|
|
|
|
|
Income tax
expenses
|
|
|
|
|
|
|
|
Mainland China
|
|
(938)
|
|
5,449
|
|
(2,054)
|
|
Overseas
|
|
-
|
|
(29)
|
|
(12)
|
|
Total income tax
expenses
|
|
(938)
|
|
5,420
|
|
(2,066)
|
|
|
|
|
|
|
|
|
|
Net income/(loss), all
attributable to the Company's ordinary shareholders
|
|
|
|
|
|
|
|
Mainland China
|
|
1,236
|
|
13,485
|
|
(17,734)
|
|
Overseas
|
|
-
|
|
(3,032)
|
|
(3,437)
|
|
Total net
income/(loss), all attributable to the Company's ordinary
shareholders
|
|
1,236
|
|
10,453
|
|
(21,171)
|
|
View original
content:https://www.prnewswire.com/news-releases/china-online-education-group-announces-first-quarter-2022-results-301574798.html
SOURCE China Online Education Group